Georgia-Pacific is the latest company seeking to leave NV Energy for the open power market
Energize Weekly, October 17, 2018
Georgia-Pacific Gypsum, which operates a gypsum wallboard and plastic manufacturing plant near Las Vegas, is seeking to leave Nevada’s largest utility, NV Energy and buy power on its own.
More than a dozen other companies have left or are seeking to leave NV Energy. Georgia-Pacific (GP) filed its application with Public Utilities Commission of Nevada on Oct. 9.
The move comes weeks before Nevada voters decide on a proposed constitutional amendment to establish an “open, competitive retail electric energy market.”
In its filing, GP said that its 2.5 megawatt annual load qualified it under state statute to seek its own power source.
“GP believes it will be able to meet its own energy needs more economically, and any commensurate reduction in Nevada Power’s total load would incrementally reduce the utility’s need for additional investment that must ultimately be paid for by customers,” the company said.
In September, Reno-based Atlantis Casino Resort Spa filed an application to leave NV Energy.
“It’s not super-complicated,” David Farahi, the chief operating officer of Atlantis’s parent company, Monarch Casinos, said in an interview with The Nevada Independent. “Whenever you can have competition for anything that you’re buying, it’s a good thing. Competition is good, monopolies are not.”
In a response, NV Energy spokeswoman Andrea Smith said in an email that the utility’s energy prices were below the national average. “These transactions can have significant consequences for remaining customers, and NV Energy will participate in the regulatory process to ensure they are not financially impacted,” she said.
GP said that it will purchase its electricity starting in 2019 from Omaha-based Tenaska Inc., a power generator and marketer.
Tenaska already supplies electricity to MGM Resorts, Wynn Resorts and Caesars Entertainment. All three bolted from NV Energy.
To leave, companies have to pay a hefty exit fee. MGM paid $86.9 million to leave the utility. Caesars paid $44 million, and Wynn paid $16 million.
In 2017, when Peppermill Resorts was given the green light to leave NV Energy, it paid a $3.3 million exit fee. When the company left NV Energy, it was supplied by Minnesota-based Cargill Power Markets.
Companies are now looking to avoid hooking up to NV Energy in the first place.
California-based Fulcrum BioEnergy, which is constructing a large waste-to-fuels project in a northern Nevada industrial park, is seeking to use another power provider. In September, NV Energy asked state regulators to levy a $1.2 million exit fee for the plant, which is still not finished. State economic officials opposed the request.
The Oakland Raiders, who are moving to a new $1.9 billion stadium in Las Vegas, have also filed an application to pre-emptively leave NV Energy.
Google is also seeking to find its own power sources for planed Nevada-based facilities. In response to its application, state regulators saw no problem with Google’s plan, which includes avoiding an exit fee.
“Google’s proposed transaction will only add energy capacity and ancillary services to the state,” the utility commission said.